As Maya noted, form 3514 calculates the Earned Income Credit, a tax credit for low income individuals that is similar (in concept at least) to the federal Earned income Tax Credit.
You apparently have a Schedule C on your federal return. This question about a Business Code is related to knowing more about your business by the State of California.
Perhaps it will help you to understand what the state is looking for by reading the Booklet for the 3514.
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